Boohoo profits down as demand recovery proves slower than expected

Boohoo has recorded a profit decline of 9.1 per cent in the first half of the year compared to an increase of 6.2 per cent last year.

Revenue was down to £729.1 million over the six-month period, down by 17 per cent compared to the previous year.

UK revenue declined by 19 per cent over the six-month period, while international figures were down by 15 per cent.

The online fast fashion brand said that higher revenue declines were down to slower recovery of demand than anticipated and in part driven by its strategy to target more profitable sales.

"Over the first half we have made substantial progress across key projects and initiatives, including the launch of our US distribution centre,” said John Lyttle, group chief executive. “We have seen significant improvements in sourcing lead times and invested in pricing to reinforce our value credentials.”

He continued: "Our confidence in the medium-term prospects for the Group remains unchanged as we execute on our key priorities where we see a clear path to improved profitability and getting back to growth."

Lyttle added that the company has identified over £125 million worth of annualised cost savings.

“Boohoo, the party’s on hold for now - the online fashion retailer enjoyed a spectacular run between its IPO in 2014 and 2021, becoming the epitome of fast fashion," said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. "But since then, the celebrations have been muted and performance has been lacklustre, to say the least."

Chiekrie said that as active customer numbers decline, the group will need to rely on price hikes in the near term.

Asos also recently reported a 15 per cent revenue decline in its fourth quarter.

It ultimately attributed the poor performance in the quarter, and particularly so in the UK, to wet weather.

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